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Dutch Diseas and the crime epidemic: an investigation of the mineral boom in Papua New Guinea

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  • Chand, Satish
  • Levantis, Theodore

Abstract

Papua New Guinea has pinned its hopes for economic development on its mineral wealth but, so far, this has been a false promise. Given Papua New Guinea’s vulnerability, this raises questions of a Dutch Disease effect. Dutch Disease is dismissed in principle, but an appreciating real exchange rate is considered to have important offsetting economic consequences via its implications for crime. Using a CGE model incorporating crime as an economic activity, the contribution to welfare of a resources boom is investigated. The results confirm that a resources boom will deliver a net welfare benefit, but far smaller than the revenues generated would suggest, and at a cost to equity.

Suggested Citation

  • Chand, Satish & Levantis, Theodore, 2000. "Dutch Diseas and the crime epidemic: an investigation of the mineral boom in Papua New Guinea," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(01), pages 1-18.
    • Handle: RePEc:ags:aareaj:117793
    DOI: 10.22004/ag.econ.117793
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    References listed on IDEAS

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    1. Garnaut, Ross & Clunies-Ross, Anthony, 1983. "Taxation of Mineral Rents," OUP Catalogue, Oxford University Press, number 9780198284543, Decembrie.
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    4. Levantis, Theodore & Fane, George, 1999. "Labour market regulation and deregulation in Papua New Guinea," Economic Modelling, Elsevier, vol. 16(2), pages 163-177, April.
    5. Davis, Graham A., 1995. "Learning to love the Dutch disease: Evidence from the mineral economies," World Development, Elsevier, vol. 23(10), pages 1765-1779, October.
    6. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
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    Cited by:

    1. Kyophilavong, Phouphet & Senesouphap, Chanthachonh & Yawdhacksa, Somnack, 2012. "Resource Boom, Growth and Poverty in Laos: what can we learn from other countries and policy simulations?," PEP Policy Briefs 161661, Partnership for Economic Policy (PEP).
    2. Clements, Kenneth & Lan, Yihui & Roberts, John, 2008. "Exchange-rate economics for the resources sector," Resources Policy, Elsevier, vol. 33(2), pages 102-117, June.
    3. repec:ags:aare16:235308 is not listed on IDEAS
    4. Dzyuba, Yu. & Bakalova, I., 2023. "CGE models for resource-based economy: A comprehensive bibliometric analysis," Journal of the New Economic Association, New Economic Association, vol. 61(4), pages 12-50.
    5. Gourley, Patrick & Madonia, Greg, 2018. "Resource booms and crime: Evidence from oil and gas production in Colorado," Resource and Energy Economics, Elsevier, vol. 54(C), pages 37-52.

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